To Properly Explain The EU's Bendy Bananas Rules: Yes, They're Real

Given the Brexit referendum in my native UK, the story about how the European Union insists that bendy bananas are illegal to sell has popped up again. And the usual defense is being made of those rules: that industry asked for these standards and the EU simply did as industry asked. However, that's not really quite and totally what happened, and underlying this is a basic economic problem over public policy which needs to be explained. I should note here two things: One, that I am hugely biased against the very idea of the existence of the European Union itself. I think it's a bad idea and everyone should leave. I'm also one of the few people around who has actually written an international standard so do have some direct experience of the point under discussion (I wrote the scandium standard contract for the Minor Metals Traders Association).

The standard story is that the European Union banned the sale of bananas that are too bendy. The standard defense of this is as The Guardian has it today:

A Brussels ban on bendy bananas is one of the EU’s most persistent myths.

Bananas have always been classified by quality and size for international trade. Because the standards, set by individual governments and the industry, were confusing, the European Commission was asked to draw up new rules.

Commission regulation 2257/94 decreed that bananas in general should be “free from malformation or abnormal curvature”. Those sold as “extra class” must be perfect, “class 1” can have “slight defects of shape” and “class 2” can have full-scale “defects of shape.”

Nothing is banned under the regulation, which sets grading rules requested by industry to make sure importers – including UK wholesalers and supermarkets – know exactly what they will be getting when they order a box of bananas.

This standard applies to bananas of the varieties (cultivars) of Musa (AAA) spp., Cavendish and Gros Michel subgroups, referred to in Annex II, for supply fresh to the consumer after preparation and packaging. Plantains, bananas intended for industrial processing and fig bananas are not covered. ... free from malformation or abnormal curvature of the fingers

So, the standards do indeed say that excessively bendy bananas may not be sold for human consumption, but can be for industrial processing. So something is banned under the regulation: excessively bendy bananas being sold for direct human consumption.

However, that's not actually what the problem with this is. The problem is that this regulation has the force of law. It is, in theory, possible that someone could be prosecuted for selling bendy (OK, too bendy) bananas for human consumption. And who in heck wants to live in a legal system that would allow that sort of nonsense? Well, obviously, the people who write the laws for the European Union, that's who, and there is our problem.

The standards themselves are pretty much directly copied over from the Codex Alimentarius, something under the general control of the Food and Agriculture Organization (part of the UN) and the World Health Organization (similarly). That, in turn is really a general collection of the various industry norms and standards used around the world. Thus, what we're calling Class 1, Extra and so on here with reference to bananas are the ways in which wholesalers, importers and so on of bananas have been marking their products over the decades. You can actually tell how old these rules are as Gros Michel hasn't really been a part of the banana trade since the 1960s when it was replaced with various Cavendish cultivars.

Note what has happened here: Time honored practice, something useful to the people in the trade, has now been translated into the law of the land. Which is our problem. Because time honored practice is actually quite easy to change, as circumstances out there in the real world change. The people in the trade can get together and simply agree that the standard terminology needs to change. Or the standard contract; thus my, as at the time I was a significant part of the world's scandium trade, writing the draft and specimen contract for how such trade might be conducted. Anyone at all is still entirely free and at liberty to trade scandium however they wish. Similarly, when banana classifications were up to the trade, then anyone could trade bananas of excessive curvature however they wished. They wouldn't be able to use the standard industry classifications, that's true, the industry itself would rapidly reject them from orderly commerce if they lied about what they did. But near circular bananas could still be sold to whoever wanted to buy them.

It's this which the EU system messes up. Not just the freedom and liberty of peeling bananas of whatever the heck shape tickles your fancy, but the entire process of putting all of these ad hoc classifications into the law restricts the adaptability of markets themselves. And that, of course, is why we have markets rather than planned systems because markets are very much better at adapting to changing circumstances.

That the EU notes that these are the generally used standards for trading bananas is just fine. That the EU puts (in near all industries, my scandium contract hasn't been so co-opted yet and I would be horrified if it ever were) near all of these rough and ready and generally agreed standards into the law is the problem. Standards? Sure. Guidance? Why not? You go to jail for bendy bananas? Please, can we have the adults back into governance?

I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am....